NEW YORK, Oct 13: NYMEX oil futures ended sharply into the red on Friday as demand worries re-emerged, all amid uncertainty whether Opec would meet soon enough to draw plans for a further output cut.
Analysts said the day’s reversal, amounting to losses of more than a dollar a barrel, appeared to be a delayed reaction to lower demand forecast by the Paris-based International Energy Agency (IEA), the West’s energy watchdog.
Also, news of an anthrax case in New York heightened anxieties and may have added to selling pressure, traders said.
NYMEX crude for November delivery settled at $22.50 a barrel, slumping 81 cents, or 3.6 per cent, on the day, after sinking as low as $22.06.
The day’s loss wiped gains on Thursday, when the market appeared ready to take off after sustaining losses of about 25 per cent since the Sept. 11 attacks against the US.
November heating oil settled at 63.84 cents a gallon, losing 2.92 cents or 4.4pc, after dipping as low as 63.25 cents.
November gasoline ended at 60.10 cents a gallon, skidding 2.63 cents or 4.2 per cent after plunging to 59.40 cents.
The reversal just caught traders by surprise, said one New York oil trader, who added that recession worries haven’t really gone away.
November crude had glided early to a $23.98 high, buoyed by signs that Opec ministers and some non-cartel producers may gather soon to address falling prices.
Overnight and early trade also shrugged off an report by the IEA that world oil demand will contract sharply this winter after the September attacks hit air travel and undermined expectations for a global economic growth rebound.
Markets were also buoyant early, supported by news on Thursday that Saudi Arabia, the world’s largest oil exporter, had cut back on November deliveries to key Europen customers. That was a sign, traders said, that the Saudis were tightening adherence to Opec supply limits.
By the afternoon, however, traders said the market had revisited the IEA report and had also seen clouds ahead of any possible Opec meeting with non-Opec producers.
In its monthly report, the IEA said it had slashed its world oil demand forecast for the fourth quarter of this year by 1.1 million barrels a day to 76.2 million bpd — a fall of 600,000 bpd on the same period in 2000.
The agency also revised lower its projection for world demand in the first quarter of 2002 by 900,000 bpd to 76.5 million bpd, a 400,000 bpd fall on the first quarter 2001.
Traders also suggested that further selling was spurred as there appeared to be little headway in a producers’ meeting that Venezuelan President Hugo Chavez was trying to organize.
Indeed, Chavez, who on Wednesday said he was trying to set up the meeting, told reporters on Friday in Rome that he was still working on organizing a gathering.
But such a meeting was not assured as he was still looking at Opec oil ministries’ schedules, he said. —Reuters